Long-term care must be studied in detail

Sunday

May 18, 2014 at 12:01 AMMay 19, 2014 at 5:43 PM

Americans are living longer than ever, but that's not unequivocally good news. The longer you live, the more likely you will need long-term care. And paying for that care is not cheap or uncomplicated.

Elliot Raphaelson

Americans are living longer than ever, but that's not unequivocally good news. The longer you live, the more likely you will need long-term care. And paying for that care is not cheap or uncomplicated.

Unfortunately, you cannot count on Medicare to cover many aspects of long-term care. It doesn't cover the cost of long-term custodial care. Nor will it pay for daily help required for activities associated with eating, dressing or bathing.

Here's what it will cover: If you are released from a hospital, after spending at least three days, Medicare will cover only up to 100 days in a skilled nursing home.

Your options for financing long-term health costs are "private pay" and Medicaid. "Private pay" refers to long-term health insurance and financial support from relatives or other private resources.

If you have few assets and only a nominal income, you can use Medicaid to cover nursing home bills and other long-term expenses. You will have to spend down any substantial assets on nursing care before you will become eligible for Medicaid. If you are married, your spouse will be able to keep some assets, according to state law. If you give away assets during the five-year period prior to filing for Medicaid, your state will make sure you are not eligible for Medicaid.

Approximately 20 states have so-called "filial support" or "filial responsibility" laws that require family members to support "indigent" relatives who are unable to pay their own expenses, including long-term-care expenses. Usually the focus is on adult children's ability to pay for the care of a parent. In most states, these laws have not been enforced in recent years. However, they are enforced in Pennsylvania, and North and South Dakota. In those states, nursing homes have successfully sued offspring when there is some "gap" in payment, where either private pay or Medicaid hasn't covered the bill.

Nursing homes have taken the position that a child who has sufficient income/assets has an obligation under state law to pay expenses associated with the indigent parent's care. In a recent Pennsylvania case, a court ruled that nursing homes did not have to prove that there has been fraudulent activity on the part of the children - the filial support law alone was the basis of a child's obligation to pay $93,000 in care costs.

Professor Katherine Pearson of Penn State's Dickinson School of Law is an expert on issues of statutory obligations for long-term care, including filial support laws. She explains that some states, such as Idaho, have repealed filial responsibility laws because of concerns about fairness and the impact on families already struggling in a weak economy. In other states, nursing homes have been more creative, turning to contract remedies or advocating for new laws to create liability for family members.

For example, in Connecticut, in two recent appellate cases, nursing homes argued that adults were liable for their parents' care expenses because they had signed nursing home contracts as responsible parties. In both cases, for technical reasons, the court ruled against the nursing homes. However, effective in 2013, Connecticut has a new statute permitting debtors to collect from "transferors" or "transferees" if the resident was denied Medicaid because of a transfer of the resident's assets or property. In 2013, New Hampshire's Legislature adopted a new law making any "fiduciary," such as an agent under a power of attorney, liable to a nursing home for negligence in failing to "promptly" complete an application for Medicaid.

Pearson reports on relevant cases on her Elder Law Prof Blog. She believes that individuals should understand the significance of nursing home agreements. Often, this means they should seek legal advice from specialists in state Medicaid law (an elder care attorney, for example) before signing any long-term-care contract, and they should seek help if there is any problem with a Medicaid application process. Such steps will help negate any liability associated with state filial responsibility laws or other "third-party" obligation laws.

Nobody can predict the extent to which they or a loved one will need long-term health care. However, the more planning you do, the easier it is to avoid legal or financial trouble. Carefully consider long-term-care policies while your health is good. These policies are less expensive the younger you are. Long-term care should be part of your overall estate plan, and the first step is acquainting yourself with your state's laws.

Contact Elliot Raphaelson, a certified court mediator in Florida with experience in estate planning, at elliotraph@gmail.com.